Setting discount approval limits on quotes

Choose floor price or gross margin percentage as your single approval metric

Pick one and apply it consistently across every quote in your pipeline. Floor price works well when your cost structure is stable and your products are distinct: a given item has a known cost, so the floor is a fixed and auditable number that anyone in the business can verify without opening a spreadsheet. Gross margin percentage works better when you sell services alongside products, or when your cost per job varies because of delivery, installation, configuration, or subcontracted labour. For most businesses selling physical products with predictable landed costs, floor price per line or per order is the simpler control. For businesses where the job cost changes with each order - a promotional merchandise business with variable decoration costs per run, or a trades contractor quoting labour-plus-materials jobs where site conditions differ - a minimum gross margin percentage is more defensible and easier to explain to the sales team. Avoid using both simultaneously. A rep who faces a floor price check and a margin percentage check on the same quote will look for the one that is easier to satisfy and use that as the target. One metric, consistently applied, closes that gap.

Set the floor for each customer tier and product category

A single floor for all customers and all products creates the same problem as a flat discount percentage: it treats unlike things alike. A promotional merchandise distributor might hold a 28 percent margin floor on standard branded apparel but a 38 percent floor on small-run print items, where setup costs consume a disproportionately large share of a small job value. A furniture dealer might set one floor for stock lines and a different floor for made-to-order pieces that carry longer lead times and higher supplier commitment risk. Start from actual cost data rather than from what feels right. Pull the last six months of completed jobs, calculate the actual margin delivered on each, and mark the ones that came in below target. Identify what they had in common: product type, customer tier, order size, delivery complexity. Set the initial floor where historical losses cluster, then test it against the same dataset to see how many historical quotes would have triggered review. If more than 15 to 20 percent of past quotes would have triggered an approval, the floor is set too high and will generate a queue rather than genuine oversight.

Assign approval authority by P&L responsibility, not seniority alone

The person who approves a below-floor quote should be the person who owns the financial consequence if the margin turns out to be wrong. That is usually the sales manager for standard customer segments and the business owner or finance lead for accounts carrying strategic pricing or committed volume arrangements. Routing every below-floor request to the business owner creates a bottleneck and signals to the sales team that crossing the floor is routine and expected. A more practical model routes low-value, marginally below-floor requests to a senior account manager or sales manager, and escalates high-value or deeply below-floor requests to the owner or finance lead. Deal size matters as much as margin depth when setting those escalation thresholds. A practical structure for a 10-to-50-person business: requests below the floor by up to three margin points on deals under £5,000 go to the sales manager. Requests below the floor by more than three margin points, or on deals above £5,000, go to the business owner. Strategic pricing exceptions outside any normal tier - custom account terms, loss-leader decisions, or multi-year volume commitments - require the business owner and finance to review together.

Define what a below-floor request must document before it routes for review

An approval request without context is a rubber stamp, not a governance control. The rep requesting below-floor approval should be required to state the commercial reason and the margin outcome if the quote proceeds at the proposed price. Both fields should be mandatory before the request can be submitted. The approver needs to see three things without having to open the quote and rebuild the deal: the floor that applies to this customer and product, what the proposed price delivers against that floor, and the rep's stated reason for the exception. Without that structure in the approval request itself, the review becomes a formality. The exception log also loses its value: patterns in the reasons are one of the most useful signals about whether the floor is calibrated correctly.

Configure your quoting tool to block quote dispatch until the approval clears

A floor price the rep can override without a recorded approval is not a floor - it is a suggestion. The quoting system needs to hold the quote in draft until the below-floor exception has been reviewed and accepted or rejected. If the system allows reps to send quotes to customers while an approval is pending, or to bypass the trigger entirely, the floor has no effect on what customers actually see and agree to. Zigaflow's quotes feature supports approval workflows that hold a quote in draft until an approver accepts or rejects the request. Setting the approval trigger at the margin threshold or floor price means the rep cannot advance the quote to a customer-facing state without the review completing. Every below-floor decision is recorded, timestamped, and tied to the quote it relates to.

Set the escalation path and response window for unanswered approval requests

Approval requests that sit for a day or two put the rep under pressure and push them toward workarounds. Define what happens when an approver does not respond within the agreed window: who the escalation goes to, and whether the rep can issue an alternative quote at or above the floor while the exception request is still pending. A practical default is that a below-floor request unanswered after one business day escalates automatically to the next level of authority. Both the rep and the approver should know the window and expect it to be enforced. An escalation path that surprises everyone when it activates is not a usable escalation path. Build the window into the system configuration rather than relying on a policy document.

Treat the first 90 days as a calibration period before treating the floor as a permanent policy

The first three months of a new discount approval system produce data more useful than any pre-launch planning exercise. Track how many below-floor requests are submitted each week, how many are approved without conditions, the reason stated for each, and the actual margin delivered on completed jobs where exceptions were granted. Two patterns indicate the floor needs adjusting. If more than 15 to 20 percent of your quotes are triggering approval requests, the floor is treating normal trading as an exceptional case. That is a calibration problem, not a sales discipline problem. Move the floor down until approval requests represent genuine outliers - unusual competitive situations, accounts you are choosing to price strategically, or market conditions you are responding to deliberately. If almost no requests trigger the floor, either the floor is set too low to offer meaningful margin protection, or reps have found ways to restructure quotes to avoid crossing it. Pull the data on any quote where the final margin landed within two or three percentage points of the floor and investigate whether those were priced there deliberately or by coincidence. A cluster of quotes just above the floor is a signal worth examining. Revisit the floor at six months and at every supplier pricing review. Costs change and the floor needs to track those changes rather than freeze at the figure that felt right on the first day. A floor that is measured correctly and enforced by the system does more than protect margin on individual quotes. It generates a record of every pricing exception your business has made, what it cost, and why. That record is the starting point for a genuine pricing review - and for conversations with the sales team that are grounded in actual outcomes rather than assumptions about why deals are being discounted.